Mortgage Fraud Crime Ring Brought Down By South District of Florida U.S. Attorney
Following the 2008 housing crisis, state prosecutors across the country have gone out of their way to discover acts of mass mortgage fraud. Recently in Florida, the United States Attorney, with the assistance of the Federal Bureau of Investigation (FBI) Miami Field Office, was able to successfully prosecute Domenico Rabuffo of Miami, Florida who was the leader and organizer of a mortgage fraud scheme that obtained an estimated $49.6 million in illegal funds. Rabuffo was sentenced to 27 years and 3 months in federal prison after it was proven that he played a major role in the $49.6 million bank wire and fraud scheme that was carried out between the years of 2003 to 2008. In addition to Rabuffo’s conviction, three other co-defendants were also convicted of conspiracy to commit bank and wire fraud, as well as other various fraud offenses.
The Complex Mortgage Fraud Scheme
The official indictment alleged that Rabuffo, along with his co-defendants, conspired to perpetrate an extremely complex mortgage fraud scheme against an assortment of FDIC-insured lenders, which included Wachovia Bank, Bank of America, Regions Bank and SunTrust Bank. This scheme was perpetrated through the use of shell companies, which were utilized to gain control and ownership over an assortment of residential property developments located in Cashiers, North Carolina. In addition to the use of shell companies, Rabuffo and his ex-wife recruited straw borrowers who they paid to apply and receive construction and lot purchase loans for the Cashiers, North Carolina development. Many of these straw borrowers testified against Rabuffo and the other co-defendants in court.
When Rabuffo and the other conspirators applied for loans, they submitted false and/or altered loan applications and supporting documents to lenders in order to fraudulently obtain the money. The settlement statements and applications for lot loans included false statements that the borrowers had paid cash due and earnest money deposits for these loans at closing with their own personal funds. In reality, the deposits and cash due was actually paid with the proceeds from their fraudulent activities. Rabuffo and his ex-wife also sent fraudulent correspondences to closing agents. Some of these correspondents included letters with forged borrower signatures in order to keep up the illusion that cash due and deposits provided at closing had been supplied from the borrower’s own funds, instead of from fraudulent activities.
Additional fraudulent activities included the use of private companies being listed as the straw borrowers’ employers, since the straw borrowers’ actual employment histories were inconsistent with the inflated incomes that they falsely presented in loan applications. These private companies were actually owned by two of the co-defendants in the case. When contacted by the various lenders, the co-defendants even went so far as to provide fraudulent employment verification for the straw borrowers who were falsely claiming employment with the private companies. The involvement of the three co-defendants greatly precipitated the mortgage fraud scheme. In fact, one of the co-defendants was a loan officer at SunTrust Mortgage. Through this position, the co-defendant was able to sponsor an assortment of fraudulent loan applications for lots at the Cashiers, North Carolina development, including an approved $33 million construction loan.
Have You Been Accused of Mortgage Fraud?
Have you been accused of fraud in South Florida? Do you need a defense attorney you can trust? Contact Miami white collar defense attorney Jeffrey S. Weiner, P.A. in South Florida today.